Collective Redundancies

29 July 2015

E Ivor Hughes Educational Foundation v Morris and others

An independent school based in a North-West London suburb was facing an uncertain future due to falling pupil numbers. The bursar calculated that the expected financial deficit for the following year would be somewhere between £130,000 and £250,000. The governors met in February 2013 and discussed options for keeping the school open. In April 2013, it was confirmed that the number of pupils for the forthcoming school year was to be lower than predicted, resulting in a deficit in excess of a quarter of a million pounds. The governors met again and decided that the school would close at the end of the following summer term.

Employers must launch a collective consultation in respect of any proposal to make large scale redundancies (20 or more employees within a period of 90 days). It was held at tribunal that the February meeting, at which it was acknowledged that the school would have to be closed unless pupil numbers improved, should have triggered the consultation process. The fact that the school didn’t commence this process meant they were left extremely vulnerable to tribunal claims.

Where an employer has not met their duty to consult, a tribunal may make a protective award of up to 90 days’ actual gross pay for each dismissed employee. Clearly this has the potential to amount to a significant sum of money! This award is intended to penalise the employer and is not designed to compensate for loss of earnings.

Where there is no consultation at all, the maximum award should be the starting point and the tribunal should then examine whether there are any mitigating circumstances. In this case, there weren’t. The employer’s lack of knowledge about their obligations was no reason to reduce the award. In fact, the tribunal labelled the school’s failure to seek legal advice “reckless”.

This case highlights how vital it is when dealing with employment law to ensure that you follow the correct procedures. Our Alpha service can provide the support your business needs. If you would like to find out more about what Alpha can do for you, please feel free to contact us.

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